B2B money transfer

By December 28, 2015Banking, Money transfer

Receiving money for shipments is not always straightforward for global exporters. Here we give an overview and tips about B2B money transfer. SWIFT transactions can be expensive (3-6%). SEPA payments are free, but only in Europe. Using a service such as B2B Pay can be a way to profit from SEPA.

B2B money transfer: an overview

Money transfer commonly states to one of the subsequent methods of payment systems, Electronic funds transfer, an umbrella term mostly used for bank card-based payments, Wire transfer, an international expedited bank-to-bank funds transfer, Money order, transfer by postal cheque, money gram or others.

The infrastructure that the money transfer is based on had to be made secure and reliable. For that companies use Linux based operating software with multi-level firewall protection and the transactions are encrypted using complex algorithms specifically designed for the purpose.

Business to business money transactions

Banks often charge a processing fee, which can be a flat fee, usually around 30 euro or 50 USD. What banks don’t tell you, there’s a percentage ranging anywhere from 3-6% on top of that, calculated from the mid-market price. Business to business (B2B) money transactions allows businesses to reduce costs, usually by a very major amount, and to simplify payments, because B2B transactions are direct and no banks are included in the middle of the process.

As the modern world has transformed into a universal community, businesses have also evolved internationally. Sending money is not confined to a physical cash dealing between two people because business organisation’s relations are not subjected to a local area or a demo graph anymore, hence the need for the B2B transactions emerged. B2B transactions are important, so that a business can extract the required output result from another business in form of raw materials or manufacturing logistical support.

B2B money transfer

Methods available for B2B transactions

Lately there’s been a rush in the online world including business to business payments. Lots of startups have launched platforms to create simpler business to business money transactions, several companies are grasping and using business to business payments as a method to cut costs and simplify payments, and countless organizations are using them as a way to reduce security risks related to paper checks such as hacked bank accounts, fake checks, or forged signatures.

Global B2B payments methods include Wire transfer, domestic and international ACH, Paper checks, prepaid debit cards and PayPal. Studies show that wire transfer, also known as the SWIFT and credit transfer is the most used method for B2B transactions nowadays. Within Europe SEPA payments are very common to make payments from one European bank account to another.

The new world’s fast track for sending money

In today’s world, people have gotten physically distant but are more connected socially, as the world has morphed into a global village. People have gone farther apart in pursuit of a better career or to support families, transferring money and funds was an issue of the modern day world, which had been resolved by money transfer services from anywhere around the world.

Understanding B2B money transfer

B2B money transfer is the transfer or exchange of any amount of money from one business enterprise to other on the basis of some product that is bought by one. This transfer of money is done through online banking nowadays and therefore requires certain methods to exchange money over the web. The methods used in B2B money transfer depend on the website or the organisation that decides which approach is more suitable.

In global transactions a B2B payment is most often initiated by the importer with their local bank. This means a wire transfer. Consequently the exporter bears the costs for the transaction.

Payment approaches followed

Different transfer and payment methods are available. Many of the firms choose to go for online debits or credit cards. Use of cheques is also done but is very rare outside of the United States, where these things are spelled checks and still used a lot. Usage of online debits or credit cards is the simplest one. While transferring money using online cards, you may be required to provide detailed information about the card, like the card number, name of the card holder, the expiration date on the card, and more. Once you are able to provide such information, the process of money transfer become very easy and quick. 

System of transactions

There are different transfer systems that are usually followed in B2B Money Transfer, these include SET (Secure Electronic Transactions), BBSePay etc. A new concept of ‘e-Invoice’ is also making its way in the B2B money transfer world.

This type of system involves two types of characters i.e. the creditor and the debtor.

  • the creditor transfers some amount of money online or over the internet
  • on the other hand the debtor is the one that will withdraw money from the bank once the creditor has transmitted it

There is an agreement that is made by the debtor with the respective bank that will receive the money from creditor.

Why I should go for online banking?

Online banking today is used vastly by an increasing number of organizations in their businesses as well as by people for their personal use. The reason for using this approach is its ease and simplicity. In the long run these organizations are in a need of a secure system for their exchange of money such that the money as well as the data regarding exchange is kept in a form which is accessible to the organizations involved only, keeping it secure from any third party or unauthorized accessibility.

Free of geographic limitations

B2B lets you enjoy exchange of money on the basis of the services offered between different buyers and sellers worldwide. The basic advantage of deciding to choose b2b online approaches of money transfer is also often the result of an objective of getting oneself free of the limitations faced due to geography.

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